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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicaid Disproportionate Share Hospital Payments to University Behavioral Healthcare Center, University of Medicine and Dentistry of New Jersey:  July 1, 1995, Through June 30, 2001," (A-02-04-01024)

July 10, 2007

PDF FileComplete Text of Report is available in PDF format (488 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine whether Medicaid disproportionate share hospital (DSH) payments to University Behavioral Healthcare Center (UBHC) for State fiscal years 1996 through 2001 complied with the hospital-specific limits imposed by section 1923(g) of the Social Security Act (the Act) and the approved State plan. 

DSH payments to UBHC exceeded the hospital-specific limits imposed by section 1923(g) of the Act and the approved State plan by $20,075,738 ($10,037,869 Federal share).  Further, we were unable to determine the reasonableness of $9,881,400 ($4,940,700 Federal share) of costs included in UBHC’s hospital-specific DSH limits because the contractor included an undetermined amount of costs for patients with private insurance coverage.  New Jersey officials told us that they had relied on the contractor to prepare the DSH claims and that, contrary to Federal requirements, they had not ensured the veracity of those claims before submitting them for Federal reimbursement.  

We recommended that New Jersey (1) refund $10,037,869 to the Federal Government, (2) work with the Centers for Medicare and Medicaid Services (CMS) to resolve $4,940,700 in set-aside costs, (3) adhere to Federal law and State plan requirements when submitting DSH claims subsequent to June 2001 for Federal reimbursement, and (4) review all work performed by consultants to ensure the veracity of future Medicaid claims to the Federal Government.  New Jersey officials generally agreed with the findings and recommendations.